The living area for 22 tenants. The tenant says it was apparent Truong was able to listen in to discussions in the house through the microphone on the camera mounted on the ceiling. Photo: Supplied / MBIE
A man who lived in an illegal boarding house in Queenstown says landlord James Truong instructed tenants to hide from MBIE inspectors as attention on the property grew.
The man - who did not want his identity revealed - says he and another person were charged $440 a week to share a small room in a converted shed out the back of the house.
The Ministry of Business and Innovation (MBIE) said Truong had been ordered to pay $113,723.56 for multiple breaches of the Residential Tenancies Act as well as refund 40 percent of the rent paid by tenants of an unlawful boarding house.
Truong was also issued with a 3-year restraining order from committing any further unlawful acts related to operating a boarding house.
The Ministry's tenancy compliance and investigations had advised Truong to stop using the building as a boarding house in 2020, but a complaint in 2023 revealed 11 people living in the five-bedroom house and another 11 people housed in two converted garages and a shed.
The tenant said he shared a room in the shed behind the house between April and July 2023.
"It's like storage but he converted it as bedrooms. There was a microwave, a sofa and two small rooms. So me and my friend is living in that one bedroom and then one Sri Lankan guy is living in the other bedroom.
"The shed doesn't have any bathrooms so we need to go inside the house to use the bathroom. Even the laundry is in there so we have to walk from the back of the house to the inside of the house," he said.
The tenant says five people living in the house's garage were evicted with a night's notice when Truong became aware of MBIE inspections. Photo: Supplied / MBIE
Landlord told tenants to hide from inspection teams
He said - as MBIE began investigating the house - Truong sent texts instructing him to leave the property or stay inside the shed when inspection teams were near.
RNZ has seen texts from Truong instructing tenants to remove food from fridges, dismantle beds and put their clothes in plastic bags ahead of inspections.
"He is messaging us to hide in the shed. He had cameras so he can see if it's MBIE. So he is messaging me saying 'ok don't go out from your room just stay there until I say so'. It's like we were doing something wrong," he said.
He said five Indonesian people living in the garage were kicked out with only a night's notice once Truong learned the house was under investigation.
Tenant didn't know he was being exploited
Being new to country, the man said he was not sure whether the living situation was normal.
"I don't know the kind of rules and it's really hard to find an accommodation so I thought like 'maybe that's how it works here'. So we don't know that we are getting exploited," he said.
He said Truong would "pursue" the tenants with texts and sudden visits and - as attention of the house grew - he attempted to pressure tenants to sign letters indicating they agreed to live in the spaces willingly.
The tenant said MBIE had tried to contact him but he did not respond because he was scared of losing his accommodation.
Landlord James Truong instructed tenants to stow away beds, clothing and food and hide from inspectors as attention on the property grew. Photo: Supplied by tenant
Penalty reflects the seriousness of offending - MBIE
National manager for MBIE's Tenancy Compliance and Investigations Team, Brett Wilson, said the penalty was not the largest order issued by the Tenancy Tribunal but the amount was reflective of the number of tenants involved and the seriousness of the issues uncovered.
Wilson said the amount of rent to be refunded to the tenants was still being determined and appealed to any people who had lived at the property under Truong to get in touch.
"MBIE expects all parties to comply with Tenancy Tribunal orders. Mr Truong has engaged with us so far and we will be working with him to arrange payment. In these cases our priority is to ensure that tenants receive the money they are entitled to and we will take all appropriate steps to make sure that happens," Wilson said.
He defended the nearly three years between Truong being told not to use the property as a boarding house in 2020 and the investigation following complaints in 2023.
"We do try and follow up cases as frequently as we can but with 600,000 estimated rental properties in the country we aren't always able to follow up cases as promptly as we would like to," Wilson said.
Inaction reinforces 'cowboy culture' in rental market
Renters United president Zac Thomas said the time between Truong being told not to run the property as a boarding house in 2020 and the eventual penalty - nearly five years later - reinforced a "cowboy culture" of non-compliance with housing standards.
"When you do the math behind what this landlord must have made from 22 people over the space of nearly five years. We're looking at around $450 a week in fines. They would have made much more than that from the rents that were being paid by the tenants. It's absolutely crazy," Thomas said.
He said until the housing crisis in places like Queenstown was addressed, tenants would continue to be taken advantage of by unscrupulous landlords.
"We're seeing more and more cases like this because of the reintroduction of no cause evictions. Tenants are too afraid to speak up - at least they did so in this case over time - but throughout the country, time and time again - we see tenants too scared to stand up for their basic rights," Thomas said.
Thomas said the Tenancy Tribunal was not properly resourced to address the scale of the problem in New Zealand.
"This should've never taken five years to get to this stage. It's disastrous for our international reputation - in the heart of our tourist capital.
"This person should never be able to be a landlord again. [The penalty] is a slap on the wrist compared to the consequences that there should be.
"Until we have proper punishments for landlords we'll continue to see this cowboy culture where people push up against the law - go past the line - because they don't believe the punishments are greater than the money they can make from these situations," Thomas said.
RNZ has been unable to contact Truong for comment.
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